Despite their much anticipated announcement early Friday of a crucial pact to confront Europe's surging debt crisis, the leaders who agreed to the deal might want to consider renaming their mutual club the European Disunion all the same. Because while the main focus of the accord was supposed to be the sweeping debt-reduction rules to which signatories will bind themselves, most of the attention was instead directed to the four countries  led by Britain  that refused or hesitated to join their 23 European partners in the new effort to quell the region's financial and economic turmoil. And in agreeing to disagree on the new treaty, leaders made it clear that the European Union is far from unified, even in crisis.

"What was on offer is not in Britain's interest, so I didn't agree to it," U.K. Prime Minister David Cameron told reporters on Friday during a break in the Brussels summit. He had gone to the meeting on a mission impossible  to reconcile the desires of his Euroskeptic backbenchers, his Europhile Liberal Democrat coalition partners and his fellow European leaders. "We're not in the euro, and I'm glad we're
not in the euro. We're never going to join the euro, and we're never going to give up this kind of sovereignty that these countries are having to give up," he said. (See if this is the last chance to save the euro.)

But there are two sides to every story, and French President Nicolas Sarkozy  who, along with German Chancellor Angela Merkel, spearheaded the drive for the new agreement on debt  lamented: "We would have preferred to have treaty reform among all 27 [members], but that wasn't possible due to the position of our British friends." What some reports call "virile" disagreements during the negotiations basically centered on British concerns that increased regulation and taxation of financial services might harm the City of London as Europe's finance capital. Germany and France had previously pledged to impose greater regulation and taxation of their financial markets, a move they expect E.U. partners to follow.

"David Cameron made a proposal that seemed to us unacceptable, a protocol to the treaty that would have exonerated the United Kingdom from a great number of financial-service regulations," Sarkozy stated early Friday, noting this wasn't the first time the U.K. has opposed tighter collective rules that its European partners have called for. "We consider, to the contrary, that part of the troubles of the world come from the lack of regulation of financial services." (See the 25 people to blame for the financial crisis.)

In contrast to Britain's outright rejection of the treaty, Hungary, the Czech Republic and Sweden indicated they might adopt it, but not before holding parliamentary debate. (None of those countries uses the euro.) The accord  most details of which were revealed by Sarkozy and Merkel on Dec. 5  enforces deficit-and-debt limits with automatic penalties on excessive-spending nations; requires signatories to pass the pact's restrictions into national law; calls for budgets proposed by governments to be reviewed at the E.U. level; and increases and speeds up funding available to assist euro-zone economies being pushed toward default by rising borrowing costs. Indeed, because the plan forces national governments to trade a degree of autonomy and sovereignty in the interests of increased economic and financial stability, Merkel called the agreement by a majority of E.U. members  and all 17 euro-zone states  a major victory in itself.

"I have always said the 17 states of the euro zone have to regain credibility, and I believe with today's decisions this can and will be achieved," Merkel said. "I believe that after long negotiations this is a very, very important result because we have learned from the past
... and because in future [there will be] binding decisions, binding rules, more influence from the commission, more community and, with that, higher coherence." (See pictures of the global financial crisis.)

Though word on general acceptance of the treaty came early Friday morning, the Brussels summit continued on into the day as details were hammered out  and British threats to try and block aspects of the
deal's application were studied. Meanwhile, the most important question about the new treaty still remains hanging: Will it convince skeptical markets that Europe has sufficiently committed itself to reducing debt levels and will take whatever steps necessary to save the euro? Initial investor reaction on Friday was tepid at best, with stock markets in both Asia and Europe mostly flat or slightly up in the wake of the agreement in Brussels. Some observers aren't surprised by that modest response.

"This agreement is fundamentally marketing that addresses politically sensitive issues like debt, but does nothing to stimulate or support growth  and growth is both essential to lowering debt, and the single most important concern of markets," says Marc Touati, an economist and director of research with the Paris-based Assya financial-services company. "There aren't many long-term investors left, so markets are reacting to whatever they see, which explains the yo-yo activity of
recent months. This deal will buy the euro some medium-term breathing room, but nothing is settled and nothing saved in the longer term without growth." (Watch a TIME video interview with Cameron.)

For that to happen, Touati argues, E.U. governments must collectively continue logical cost cutting without resorting to overly aggressive, consumption-culling tax hikes. Then, he says, comes the biggest challenge: convincing German officials to accept calls  primarily from France  to allow the European Central Bank (ECB) to play a more activist role in the crisis. That would involve it massively buying up
the bonds of sinking euro-zone states and unrolling monetary policies to lower the euro's value in a manner that increases the competitiveness and export appeal of companies that use it. (See why the euro crisis proves that stocks are the new bonds.)

"The problem is, the Germans have been incredibly dogmatic in insisting on the terms of the treaty agreed to in Brussels and in refusing any change of the ECB's independent status or range of activity," Touati says  predicting that that stance, too, will change. "This thing isn't over, and the Germans will see that soon enough and finally do what they have to when they realize it's either that or watch the euro fail."